The restoration of grassland and its dependence on the dispersal of characteristic plant species was analysed in the Saale River floodplain near Halle (Germany). Species composition and soil nutrient content were investigated in grassland converted to extensive management in 1989 (“restoration grassland”) and in adjacent grassland that had never been managed intensively (“old grassland”). In two experiments dispersal of Silaum silaus and Serratula tinctoria was studied following introduction of these species into “restoration grassland”. Seedling establishment was recorded and compared with the “old grassland”. Ten years after conversion to extensive management, characteristic floodplain grassland species had only reappeared in locations very close to “old grassland”. There were still differences in soil nutrient content of both grassland sites but a comparison of seedling survival provided evidence that conditions of establishment were similar. However, establishment rates appeared to be low in both grassland types indicating that a large initial input of seeds is required for re-establishment. Seeds of Silaum silaus and Serratula tinctoria were dispersed very short distances. About 75% of the seedlings were found within 1.5 m of parent plants. Management and flooding did not increase dispersal distances. The results strongly suggest that poor dispersal was the main limiting factor in determining the success of restoration. The implications of this result for nature conservation are discussed.